The Home Equity Theft Reporter

Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.

Saturday, September 10, 2016

Consumer Feds Acknowledge Use Of "Mystery Shoppers" In Recently-Settled $10.6 Million Race Discrimination Case Against Mortgage Lender; Fair Housing Advocate: "Testers Are The Unmarked Squad Cars In The Housing Market!"

National Public Radio reports:

When the Consumer Financial Protection Bureau looked into the Mississippi-based regional bank BancorpSouth, it didn't just review thousands of loan applications. It sent in undercover operatives — some white, some black — who pretended to be customers applying for loans.

"They had similar credit scores and similar background and situations," says CFPB Director Richard Cordray. "Our investigation had found that BancorpSouth had engaged in illegal redlining in Memphis, meaning refusing to lend into specific areas of the city."

That is, neighborhoods where most residents were African-Americans or other minorities. Cordray says on top of that, the bank "charged African-American customers higher interest rates for mortgages than similarly situated white applicants."

He also says the bank denied loans to African-American applicants more often than white applicants — nearly twice as often in relative terms, according to the complaint.

When regulators get people to pose as customers, it's called "testing." This case marks the first time the CFPB has said it is using testers for enforcement. It just disclosed that earlier this summer when it announced a $10.6 million settlement with BancorpSouth.

The bank did not admit wrongdoing and said in a statement: "BancorpSouth is fully committed to fair and responsible lending practices."

The CFPB isn't disclosing the size and scope of its testing operation but says it will continue to use testers — also sometimes called "mystery shoppers" — when appropriate. Some consumer groups are happy to hear that.

"It's an incredibly powerful tool," says Fred Freiberg, founder of the Fair Housing Justice Center in New York. For years, he ran a testing enforcement program at the U.S. Justice Department. He used testers to enforce fair housing laws. They posed as people looking to buy or rent houses and apartments.

"Testers are the unmarked squad cars in the housing market," he says. "It is the most effective way of finding out how people are actually being treated in the marketplace."

A Queens landlord who wouldn’t spend $10,000 on a new bathtub to accommodate a severely disabled tenant has been hit with $120,000 in penalties and damages by the city’s Human Rights Commission.

Milena Jovic refused multiple requests to install an accessible bathtub in Lynn Blue’s third-floor apartment for her 17-year-old daughter, Bianca Torres, who suffers from serious disabilities that include autism, seizure disorders, a cleft palate and vision problems, according to official documents.

Blue complained that the tub is too high and it’s nearly impossible for her to get Bianca — who wears a leg brace and often crawls to get around the apartment — inside.

“She’s an evil person, she doesn’t care . . . It’s horrible. It’s been a nightmare . . . Shame on her,” a tearful Blue said Friday [August 26]. “I would move out if I could, just for my sanity . . . I used to love my home; now I hate coming home.”

Blue reached out for help to the commission, which ordered that a smaller tub be installed that would have cost between $8,500 and $10,000.

But after two years of negotiations and no movement — the landlord insisted the tub was up to code — the commission filed charges.

An administrative law judge, John Spooner, decided that Blue suffered “considerable anxiety” over the two years and imposed penalties totalling $120,000 — a $40,000 fine, $50,000 to Blue for emotional distress and $30,000 to her daughter.

The commission, which asked for even higher penalties totaling $370,000, said it was reviewing the judge’s recommendation.

Jovic told The Post she missed the administrative trial because her lawyer had major surgery and plans to appeal.

As to the reasonability of the accommodation requested, respondents cannot be heard to contend that a modified bathtub or walk-in shower is unreasonable because, over the course of the past year, they have refused to provide any information to the Commission suggesting otherwise.

Because respondents have defied the Commission’s efforts to discover evidence as to whether the requested reasonable accommodation might cause an undue burden on the landlord, the accommodation must be deemed reasonable as a matter of law.

It alleges that the named parties have "engaged in a continuous pattern and practice of discrimination against people with disabilities."

It goes on to outline things like steps, doors, and wheelchair inaccessible kitchens and bathrooms in the apartment units and says that those things, "effectively communicate that people with disabilities are not welcome at 118 Flats."

Cleveland 19 reached out to WXZ Residential Group, the owner of Circle Lofts 118 but was told Monday afternoon no one was available to comment.

The Housing Research & Advocacy Center identifies itself as a “private, non-profit organization…whose mission is to promote fair housing and diverse communities, and work to eliminate housing discrimination in Northeast Ohio.”

Tenant With Disabilities Who Allegedly Was Denied Reasonable Accommodation Request For Assistance Animal, Then Denied Lease Renewal When Mentioning The Continuing Need Scores $15K Lawsuit Settlement From Condo Association; HOA Also Agrees To "Donate" Add'l $10K To Non-Profit Group That Trains Service Dogs

From the U.S. Department of Housing & Urban Development (Washington, D.C.):

The U.S. Department of Housing and Urban Development (HUD) announced [] an agreement with Delvista Towers Condominium Association, Inc., of Aventura, Florida, and its property management company, resolving allegations of housing discrimination against residents with disabilities. HUD claimed the condo association and its property managers denied the reasonable accommodation requests of residents with disabilities who needed assistance animals. Read the Conciliation Agreement.

***

HUD initiated a discrimination complaint in April 2014 after receiving several reports from residents of Delvista Towers claiming their rights were being violated because of their disability.

One resident alleged her request for a service animal for her son had been denied. Specifically, the woman said that when she contacted the property manager about her son's need for the reasonable accommodation, she was told that the request would not be approved and that the condominium was "currently involved in very expensive lawsuits with other residents regarding service animals." The woman further alleged that she was denied the opportunity to renew her lease because she mentioned her son's need for a service animal.

HUD's investigation indicated that other residents with disabilities were also denied their requests for assistance animals or refrained from requesting an accommodation for fear of being evicted.

Under the Conciliation Agreement, Delvista and its property management company, AKAM On-Site of Dania Beach, Fla., agreed to compensate one of the aggrieved persons and to donate to a non-profit disability rights organization.(1) They also agreed to develop a reasonable accommodation policy that will be reviewed and approved by HUD and to provide for training of board members and property managers on the new policy and the Fair Housing Act.

Any person who believes he or she has experienced discrimination may file a complaint by contacting HUD's Office of Fair Housing and Equal Opportunity at (800) 669-9777 (voice) or (800) 927-9275 (TTY). Housing discrimination complaints may also be filed by going to www.hud.gov/fairhousing, or by downloading HUD's free housing discrimination mobile application, which can be accessed through Apple and Android devices.

Another Landlord Gets Tagged By HUD With Fair Housing Lawsuit; Target Allegedly Had "No Children" Stipulation In Its Leases With Tenants, Refused To Rent To Woman After Finding Out She Had A 14-Year Old Son

From the U.S. Department of Housing & Urban Development (Washington, D.C.):

The U.S. Department of Housing and Urban Development (HUD) [] announced it is charging a Georgia couple with housing discrimination for refusing to rent an apartment they owned to a single mother and her son. HUD’s investigation alleges landlords James and Ella Collier denied one woman’s application because she had a 14-year-old son and that they had a “NO CHILDREN” stipulation in multiple lease agreements with other tenants. Read HUD’s charge.

The Fair Housing Act prohibits housing providers from denying or limiting housing to families with children. This includes waiving pet restrictions for assistance animals.

***

The case came to HUD’s attention when the woman filed a complaint alleging that the Colliers, owners of a number of rental properties in East Point, Georgia, refused to rent an apartment to her after learning she had a 14-year-old son. In August of 2013, the woman noticed a “For Rent” sign in the window of one of the Colliers’ properties and sought information from the landlords and was asked a series of questions related to her employment and her family size. The woman told HUD that Ella Collier said she “would not rent to applicants with children.”

A Long Beach man has pleaded guilty to a federal fraud charge related to a long-running mortgage rescue scheme that involved nearly $3 million in illegal fees charged to distressed homeowners and about 200 fraudulent bankruptcy petitions.

Karl Robinson, 52, pleaded guilty [] to one count of bankruptcy fraud before United States District Judge Manuel Real.

Robinson operated the foreclosure rescue scheme from 2008 until 2013 under his own name and other names, including “Stay In Your Home Today,” “21st Century Development” and “Genesis Ventures Corporation.” The businesses provided illegal foreclosure- and eviction-delay services to homeowners who had defaulted on their mortgages. The purpose of the scheme was to obtain money from distressed homeowners, and in exchange Robinson was able to hinder, delay and obstruct lawful foreclosure and eviction actions against property owners who had defaulted on their mortgages.

As part of the scheme, Robinson filed bogus grant deeds in county records offices and other fake documents in formal eviction proceedings to make it appear that fictional people held interests in distressed properties. He then fraudulently filed bankruptcy petitions in the names of the fictional people to trigger an “automatic stay” in the bankruptcy cases. The filing of a bankruptcy petition has the effect of suspending all creditor actions, including foreclosure proceedings commenced by mortgage lenders and eviction actions commenced by purchasers of foreclosed properties.

“This defendant filed scores of fraudulent bankruptcy actions – sometimes on multiple occasions in relation to a single property,” said United States Attorney Eileen M. Decker. “He took advantage of distressed homeowners by stealing identities and lying to them about what he could do for their properties as long as they continued to pay his fees.”

Robinson admitted that as part of his scheme he obtained nearly $3 million from distressed homeowners and filed more than 200 fake bankruptcies.

“Mr. Robinson used his position as a pastor gain the trust of distressed homeowners, only to lure them with false hope while he worked the system to get rich,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI and our partners with the FHFA-OIG and the U.S Attorney's Office will continue to combat schemes targeting vulnerable homeowners.”

San Diego telemarketer Charles Rose was sentenced [] to eight months in custody for his role in a fraudulent loan modification scheme that employed as many as 30 telemarketers to sell bogus legal services to hundreds of struggling homeowners. In reality, this “law firm” had just one figurehead attorney, and did not perform any legal services for the 1,000 clients they swindled.

The telemarketers, who reported to Rose and followed his example to make sales, recruited new customers using a series of lies designed to lure them into paying a hefty $3,500 fee to the “law firm” of Haffar & Associates. Using scripts, form letters, and his own recorded sales calls, Rose taught his telemarketing staff how to use a variety of false statements to get desperate homeowners to pay the exorbitant fees. Among the lies used by Rose and his staff were claims of the firm’s “98% success rate,” clean record with the California State Bar, special access and success with “just about every lender,” and specialized staff and “lawyers” who would conduct a “forensic audit” of the clients’ loan documents.

Rose and his co-schemers falsely told victims that their attorneys had “never” lost a client’s home to foreclosure, and that although the firm had a “100% money back guarantee,” no customer had “ever asked for a refund.” In fact, as Rose and figurehead attorney Mohamed Haffar have both admitted, Haffar & Associates did not have anything close to a 98% success rate, did not have any special connections with banks or their legal departments, did not successfully complete loan modifications, and many of their dissatisfied customers never received the refunds they requested.

One of Rose’s co-schemers, Michael Nazarinia, did actually supervise the “case managers” who submitted some loan modification applications to banks. But in contrast to the representations made to clients, attorney Haffar did not directly supervise Nazarinia’s case managers – instead, they dealt with clients without any input or direction from Haffar. The schemers understood that Haffar’s fees were intended to compensate him for the risk he took in allowing Nazarinia and Rose to use his name, bar license, and law firm to execute the scheme.

After Haffar & Associates stopped doing new business, Rose and Nazarinia started a new company, called “REST Report Matters,” charging even more money for a product they claimed would facilitate the review of applications for loan modifications. Rose admitted that he made false representations to potential clients in order to induce them to sign up and pay their fees.

In addition to his fraudulent loan modification scheme, Rose was also charged with tax offenses for failing to report over $120,000 in income from Haffar & Associates to the IRS.

***

Three co-defendants were also convicted on federal charges in the scheme. In addition to stipulating to his disbarment, attorney Mohamed Haffar pleaded guilty to tax charges relating to the venture [...], and was later sentenced [...] to three months. Michael Nazarinia pleaded guilty in November 2015 to mail fraud and tax offenses, [... and] was sentenced to nine months in prison, [...]. And in May 2015, Stacy Tuers pleaded guilty on tax charges and admitted that he knew the telemarketers were making false statements to potential clients, but continued to sell Haffar & Associates loan modification services.

California-Based Trio Get Multi-Year Prison Time For Running Loan Modification Scam That Fleeced Over 1,000 Financially-Strapped Homeowners Out Of $3+ Million

From the Office of the U.S. Attorney (Bridgeport, Connecticut):

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that two California residents involved in an extensive mortgage loan modification scheme were sentenced [] in Bridgeport federal court. U.S. District Judge Stefan R. Underhill sentenced SERJ GEUTSSOYAN, also known as “Anthony Kirk,” 34, of Santa Ana, to 52 months of imprisonment, and DANIEL SHIAU, also known as “Scott Decker,” 30, of Irvine, to 58 months of imprisonment. GEUTSSOYSAN and SHIAU also were ordered to serve three years of supervised release and pay restitution in the amount of $2,390,496.59.

According to court documents and statements made in court, Aria Maleki, GEUTSSOYAN, SHIAU and others jointly operated a series of California-based companies that falsely purported to provide home mortgage loan modifications and other consumer debt relief services to numerous homeowners in Connecticut and across the United States in exchange for upfront fees.(1)

***

Few homeowners ever received any type of mortgage loan modification through the defendants’ companies, and few homeowners received refunds of their fees.

Participants in the scheme used pseudonyms and periodically changed their business and operating names to evade detection. The defendants also directed homeowners to mail their checks to addresses and mail boxes that the defendants and their co-conspirators had set up in states other than California.

As a result of this scheme, more than 1,000 homeowners suffered losses totaling more than $3 million.

***

On July 18, 2016, Maleki was sentenced to 112 months of imprisonment. He also forfeited approximately $350,000 that investigators seized from various bank accounts, approximately $362,000 sized from a Bitcoin account, a $100,000 cashier’s check, and a 2013 Ferrari 458 Italia.

The other four defendants also have pleaded guilty and await sentencing.

Members Of Jacksonville-Based Loan Modification Racket All Escape Criminal Prosecution Despite Fleecing Million$ Out Of Financially-Strapped Homeowners; (Apparently Shorthanded?) Feds Settle For (Mostly Uncollectible?) Money Judgments In FTC Civil Lawsuits For Conduct Others Have Gotten Prison Time For; Scammers Also Ordered To Stop Screwing The Consumer Public In The Future (Big Deal!)

The Federal Trade Commission recently announced:

The principals of a mortgage relief operation and their companies are banned from the mortgage loan modification and debt relief business under court orders obtained by the Federal Trade Commission. The orders resolve charges that the scheme falsely promised financially distressed homeowners they would receive legal representation to prevent foreclosure or lower their mortgage payments and interest rates, and illegally charged thousands of dollars in advance.

The FTC charged the Jacksonville, Florida-based operation in 2014 as part of a federal-state enforcement sweep, Operation Mis-Modification. The court subsequently ordered defendants to stop misleading consumers and froze their assets pending litigation.

The FTC alleged that the defendants typically told consumers they would get a loan modification or that their chance of getting one was 85 percent to 100 percent, and collected up to $4,000 in advance, and sometimes an ongoing monthly fee of $300 or more. In some cases, they told people not to pay their mortgages while their supposed loan modifications were pending, and falsely claimed that, by auditing their mortgage documents for lender errors or lender fraud, they would be able to convince the lenders to modify the consumers’ home loans.

Under a stipulated order for permanent injunction that Edward William Rennick III, Surety Law Group LLP and Redstone Law Group LLC agreed to, they are banned from selling secured and unsecured debt relief products or services, and prohibited from misrepresenting any financial products and services, and from violating the Do Not Call Registry rules. The order imposes an $8 million judgment that will be suspended upon surrender of frozen assets.

On July 7, 2016, the court granted the FTC’s motion for summary judgment against Michael W. Lanier, Rogelio Robles, Lanier Law LLC, Fortress Law Group LLC, Fortress Law Group PC and Liberty & Trust Law Group of Florida LLC for violations of the FTC Act and the Mortgage Assistance Relief Services Rule. The order found the facts of the case indisputable, including:

Members of the operation made numerous misrepresentations to consumers;

The companies operated as “law firms” via agreements with lawyers in various states who did little or no actual legal work for the defendants’ clients;

Some attorneys’ names and signatures were used on documents without their authorization;

Consumers stated that despite being led to believe that a lawyer would work on their case, many never spoke to one, never got a lawyer’s name, and never saw anything to suggest that a lawyer had done any work for them;

Some consumers who began paying the defendants stopped hearing from them;

Some consumers who contacted their lenders directly were told no paperwork had come from the defendants; and

Some consumers received mortgage modifications, but not on the terms they were promised, and sometimes with a higher monthly payment than they had been paying.

The Court imposed a permanent order on these defendants that subjects them to the same conduct terms as the defendants who settled with the agency and includes a judgment of more than $13.5 million, which represents the defendants’ net revenues. The orders bar the defendants from profiting from customers’ personal information and failing to dispose of it properly.

Thursday, September 08, 2016

NJ AG Pinches Two, Seeks Another For Allegedly Running Elaborate Mortgage Fraud Racket That Used Stolen Or Fictitious I.D.s To Create All Hallmarks, Fill All Required Roles Of Legit Residential Loan Transaction; Property Used As Collateral To Fleece Banks Out Of $930K+ Are Owned By Unwitting Homeowners Who Played No Role In Scam

From the Office of the New Jersey Attorney General:

Attorney General Christopher S. Porrino announced that a man and a woman were arrested [] on first-degree charges for allegedly carrying out an elaborate identity theft and mortgage fraud scheme in which they stole nearly $1 million from various lenders. Another man who allegedly participated in the criminal scheme is being sought as a fugitive.

These two defendants were arrested [] on charges of first-degree money laundering, first-degree conspiracy, second-degree identity theft and second-degree theft by deception:

The third defendant, Laquan Jones, 42, of Newark, N.J., is being sought on an arrest warrant on the same charges. Bail has been set at $500,000 for Hunter, and $250,000 for Phillip. Investigators executed search warrants at Hunter’s home in Union and a second home in Hillside, N.J., seizing computers, phones, additional electronic equipment, documents and other potential evidence.

***

The defendants and additional unidentified co-conspirators allegedly used stolen identities to steal more than $930,000 from lenders through at least eight fraudulent loan transactions, including four mortgage loans, three home equity lines of credit (HELOCs), and one car loan. The defendants allegedly used stolen or fictitious identities not only for the borrowers, but for numerous other persons and businesses connected to the transactions.

They created all of the hallmarks of a legitimate residential loan transaction by using stolen and fictitious identities to fill all of the required roles: seller, attorneys, settlement agent, title agent, homeowner’s insurance company, notary and other parties. The loan applications contained many falsified documents, including closing documents, wire transfer documents and title insurance documents, all of which were purportedly witnessed, prepared or reviewed by parties and professionals who, in fact, either did not exist or had no knowledge of the transactions.

By creating the illusion of a legitimate transaction, the defendants allegedly deceived unsuspecting lenders into processing the fraudulent loan applications. Once the loan was approved, the victim-lender disbursed the loan proceeds – in the case of the mortgage loans, amounts ranging from $196,000 to $230,000 – to a bank account opened in the fictitious or stolen name of a title company or law firm.|

***

The owners of the homes connected to the loans were never really parties to the transactions, and with respect to the mortgage loans, none of the homes were actually sold.

A class action lawsuit recently filed in federal court accuses two prominent law firms, and more than 70 condominium associations they represent, of “the wrongful and unlawful sale” of condominium units through an improper foreclosure process.

Nonjudicial foreclosures allow real property to be sold to satisfy debts without going to court. Instead, the party initiating the foreclosure, typically a mortgage lender, is simply required to notify the property owner and, if the debt isn’t paid, proceed to auction off the property themselves, selling to the highest bidder.

In the majority of cases, the properties end up being sold to the lender or the condominium association, often with little or no money actually changing hands.

Hawaii law allows nonjudicial foreclosures in certain circumstances, but their use to collect debts owed to condominium associations is controversial.

The suit alleges that these foreclosures are barred unless the condominium declaration contains a specific “power of sale” clause, which acts as a contract giving the condo association the right to foreclose on an owner’s property to collect delinquent maintenance fees or other unpaid assessments. And, according to the suit, none of the defendant associations had the required “power of sale” in their governing documents.

The lawsuit seeks payment of restitution and damages, including punitive damages, along with interest, to those whose properties were allegedly improperly foreclosed.

The defendants reject the allegations, pointing to a specific provision the Legislature added into the state’s condominium law that provides condo associations with the same foreclosure powers given to mortgage lenders, including the right to choose a nonjudicial process.

This case is far from the first case challenging the legality of nonjudicial foreclosures by condominium associations seeking to recoup unpaid and past due maintenance fees from owners, and it’s not the first seeking certification as a class action.

But it is prompting an unusual amount of concern among those with special interests in condominiums, including condo boards, attorneys, management companies, and insurers, because a respected local law firm has teamed up in the case with attorneys from two San Diego-based firms specializing in consumer-oriented class-action lawsuits.

If the plaintiffs win, the potential damages are staggering, and could give a whole new meaning to the often-heard term, “foreclosure crisis.”

***

Honolulu attorney Jim Bickerton, who recently filed a separate class-action lawsuit in state court challenging similar nonjudicial foreclosures and naming the Porter law firm as one of the defendants, agreed condo boards need to assess the risks.

Wednesday, September 07, 2016

Elderly California Woman Who Dipped Into Her Home Equity When Investing & Losing $280K Life Savings In What Turned Out To Be Ponzi Scheme Scores $15+ Million Jury Verdict Holding Major Insurer Liable For Rogue Salesman's Illicit Handiwork

In Los Angeles, California, the Los Angeles Times reports:

A Simi Valley retiree was awarded $15.4 million in damages [] after insurance giant MetLife was found liable for losses she suffered in an investment that turned out to be a Ponzi scheme.

A Los Angeles Superior Court jury said that the New York insurer, two of its subsidiaries and broker Tony Russon should pay the punitive damages to Christine Ramirez — on top of about $240,000 she lost in the scheme run by now deceased Sherman Oaks money manager Bruce Fred Friedman.

Although MetLife officials indicated that they might appeal the case, the amount of punitive damages awarded to Ramirez could make it more likely for the insurer to pursue settlements with nearly 100 other plaintiffs who also lost money.

“I can’t believe it,” said Ramirez, who is in her mid-70s and fighting late-stage breast cancer. “It feels wonderful.”

MetLife spokesman Chris Stern said the insurer was “disappointed with the outcome and we anticipate appealing this decision.”

***

After an eight-week trial, the defendants were found liable [] for negligence and aiding and abetting both financial elder abuse and violation of California securities laws. Ramirez also was awarded the money she lost in the scheme.

The punitive damages were awarded Wednesday after separate deliberations. MetLife’s share totaled $10 million. Subsidiaries New England Securities and New England Life Insurance Co., were ordered to pay $2.5 million each, while Russon is responsible for $330,000, according to the plaintiff attorneys.

“Companies have to be liable for the conduct of their agents,” said Richard Donahoo, one of the attorneys representing Ramirez and other investors who are pursuing claims against MetLife.

Ramirez is one of 98 plaintiffs who have sued the insurer in a handful of cases related to investments in DLG, but her case was allowed to proceed first because of her medical condition. A case involving more than 30 plaintiffs could go to trial next spring.

An attorney for Russon could not be reached for comment.

Ramirez originally invested about $280,000 in DLG but recouped some of that in payments from a court-appointed receiver that took over the investment fund in 2009. She was still out nearly $240,000 prior to the jury verdicts.

“I made up my mind a long time ago that that money was gone,” she said.

Anonymous Tip To State Social Services Agency Triggers Probe, Subsequent Arrest Of Central Florida Man For Allegedly Abusing POA To Take Title To Alzheimer's-Afflicted, Nursing Home-Bound Mom's Home, Living Off Her Money, Leaving Her Facing The Boot After Stiffing Care Facility Out Of $14K+

In Grand Island, Florida, Villages-News.com reports:

A 60-year-old man was arrested after an investigation revealed he was living off his mother’s money and had stiffed her nursing home.

The man’s mother, who has been diagnosed with Alzheimer’s Disease, was facing eviction from the Springs of Lady Lake Assisted Living Facility and owed more than $14,000,

The investigation was launched after an anonymous tip to the Department of Children and Families in which the tipster said Brian Scott Schaffer was living on his mother’s money at her home in Grand Island, according to an arrest affidavit from the Lady Lake Police Department.

Armed with his mother’s power of attorney, Schaffer had taken ownership of his mother’s home.

In an interview with a DCF agent and a Lady Lake police detective, Schaffer admitted he was living on his mother’s Social Security check and her late husband’s pension. He said he couldn’t afford to pay her nursing home bills. Asked if he was planning to bring her home to care for her, he said he was not physically able to do so.

He was arrested [] at his home in Groveland on a warrant charging him with felony exploitation of the elderly. He was booked at the Lake County Jail and released after posting $5,000 bond.

Tuesday, September 06, 2016

Real Estate Operator, Co-Conspiring Attorney Plead Guilty To Fraudulently Scoring Over $30 Million By Forging & Recording Fraudulent Lien Satisfactions On Luxury Homes, Then Pretending Existing Mortgages Have Been Paid Off To Fleece More Cash From New Lenders

From the Office of the U.S. Attorney (San Diego, California):

San Diego businessman Courtland Gettel and Arizona attorney Jeffrey Greenberg pleaded guilty [] to participating in a massive scheme in which they obtained tens of millions of dollars in fraudulently-obtained loan proceeds.

The conspirators generated the money by taking out huge loans against multi-million dollar homes in La Jolla and Del Mar, then pretending those loans had been paid off in order to secure more loans from new lenders -- who were led to believe by forged documentation that the homes were debt-free.

To pull of the scam, Gettel, Greenberg, and their co-conspirators created forged real estate lien “releases” and recorded fraudulent records at the San Diego County Recorder’s Office, wreaking havoc on the chain of title for these homes. They then defaulted on their obligations to repay the loans, leaving the lenders to dispute the validity of their secured interests, and causing millions of dollars in losses from unpaid loans.

Gettel ran a real estate investment firm known both as Conix, Inc. and Variant Commercial Real Estate (“VCRE”), which refurbished single-family homes, purchased distressed debt, and purchased and refurbished commercial real estate projects. As part of his plea, Gettel admitted that he and his informal business partner acquired high-end homes in La Jolla and Del Mar by pretending to real estate lenders that they intended to use the homes as luxury rental properties—although in fact, they lived in the properties along with their families. When they needed money to fund other business deals, Gettel and his partner began negotiating with new lenders, pretending that the first loans never existed or had already been paid off.

Their attorney, Greenberg, admitted that he used his expertise as a lawyer to generate and record fraudulent records, making it appear that prior loans were paid off, to help close the fraudulent deals. This went on for more than a year, during which time Gettel, Greenberg, and their co-conspirators obtained at least $33.6 million in fraudulent proceeds from no less than eight multi-million dollar fraudulent loans.

Greenberg also pled guilty to participating in an equally massive fraud that occurred in Tucson, Arizona, where he worked for Conix and VCRE. In that scheme, Greenberg admitted that he and his co-conspirators obtained tens of millions of dollars in unearned payments from a real estate financing firm by creating false invoices and expense reports for work purportedly performed on their commercial real estate portfolio. Instead of using the money to refurbish their commercial properties as required, Greenberg and his co-conspirators used the tens of millions of dollars they generated for their own personal use and benefit.

Gettel relied on Greenberg to help hide the true nature of the transactions. He directed the proceeds to Greenberg’s attorney-trust bank accounts before distributing the money further. He also relied on other co-conspirators to forge his own signature and then fraudulently notarize the forgeries, so documents would be harder to trace back to the perpetrators. In late 2014, the lenders uncovered the fraud, and began to discover that their secured interests in the properties were worthless. Gettel and his partner agreed to conceal their fraud by falsely denying any knowledge about the fraudulent loans. They also tried to cover up the scheme further by creating yet more fraudulent documents to hide their tracks. Another co-conspirator – who was a notary public – notarized fraudulent documents, hid or destroyed her notary book, and then falsely reported it lost to the California Secretary of State.

As part of their pleas, Gettel and Greenberg agreed to forfeit the proceeds they stole from the various lenders and pay restitution to the victims. [more]

The United States Attorney’s Office announced that [...] JOSEPH HAL KINLAW, JR., 63, of Bald Head Island, North Carolina, pled guilty to Bank Fraud.(1)

Based upon the Criminal Information and evidence offered at the time of KINLAW’s guilty plea, KINLAW was a licensed North Carolina attorney who operated various alleged real estate investment and development entities on behalf of investors. KINLAW used the entities to obtain real estate development loans from Branch Banking and Trust (BB&T), and First Citizens Bank. BB&T and First Citizens Bank extended loans to these entities under the auspices that the entities would be engaged in the development of residential real estate in various subdivisions in the area of Camp Lejeune in Onslow County.

Between January of 2011 and April of 2013, KINLAW used the real estate development entities to defraud BB&T and First Citizens Bank by falsifying the legal descriptions of the loan collateral, and by falsifying releases of the collateral.

By drafting a false legal description of the property, KINLAW was able to use the collateral for other real estate investment activities and loans. By fraudulently releasing the banks’ collateral before the banks’ loans had been satisfied, KINLAW was able, in several instances, to convey the collateral to third parties for value and continue the scheme.

***

Because KINLAW had substituted false legal descriptions of bank collateral, and fraudulently conveyed bank collateral, BB&T and First Citizens Bank were unable to capture their loan losses in foreclosure. Various title insurance companies and investors also lost substantial funds due to the scheme. While the exact amount of the loss remains the subject of investigation, losses are presently anticipated to exceed $18 Million.

Detroit DA Bags Pair For Allegedly Using Forged Deed To Hijack Title To Dead Owner's Home; Probe Triggered By Complaint Of Suspicious Ownership Transfer Filed By Local Resident Affiliated With Homeowners' Asoociation

In Detroit, Michigan, The Detroit News reports:

Fraud charges have been filed against a Wayne County assistant deputy treasurer and another woman after they allegedly conspired to illegally transfer the home of a deceased woman.

Felicia Ann Tyler served as Wayne County Assistant Deputy Treasurer of Land Management in December 2015, when she allegedly worked with defendant Donna White to fraudulently acquire a home for White [...] in Detroit’s Woodward Village Neighborhood, according to the Wayne County Prosecutor’s Office.

The home belonged to Detroiter Edwina White, who died Sept. 7, 2015, and was not related to Donna White, officials said.

It is alleged that a quitclaim deed was recorded for the home on Dec. 18, 2015, a few months after the homeowner’s death. The home then was transferred to Donna White’s possession on Jan. 7, 2016.

The situation was flagged by a woman affiliated with the Woodward Village Neighborhood Association, after she noticed the property was transferred after Edwina White’s death. This woman filed a fraud complaint with the Wayne County Mortgage and Deed Fraud Unit, officials said.

An investigation revealed that Tyler allegedly destroyed one quitclaim deed on Dec. 18, 2015, and then created a new one bearing a fraudulent signature for Edwina White, officials said. She is accused of violating the Michigan Public Notary Act by notarizing the form without Edwina White’s true signature.

Tyler has been charged with one count of notary public violation, which is a four-year felony. She also has been placed administrative leave without pay from her position at the treasurer’s office.

Donna White has been charged with uttering and publishing a document affecting real property, a 14-year felony; forgery of a document affecting real property, a 14-year felony; and filing a fraudulent conveyance, a three-year felony.

***

[Wayne County District Attorney Kim] Worthy called on the public to report suspicious activity.

“Fraudulent transfers of property have the potential to erode our neighborhoods,” she said. “It is important to report fraudulent activity occurring in Wayne County to the Register of Deeds’ Fraud Hotline: (313) 224-5869.”

In a two-page ruling, Judge Ian Thornhill wrote that the settlement agreement would be accepted and plaintiffs named in the case would receive security deposit refunds within 30 days of the ruling.

***

Per the settlement, all members of the class — those who rented from TSB Holdings and Big Ten Property Management during lease years 2010-11 and 2011-12 — are eligible to receive $65, or up to $130 if they were tenants both years.

The original case challenged illegal provisions included in leases for Barkalow's property management companies.

In March 2014, Judge Douglas Russell granted the Tenants' Project class action certification and ruled that several provisions in the leases, including one that imposed an automatic fee for carpet cleaning when a tenant moved out, were illegal.

Other illegal provisions included fees, fines, penalties and charges that go beyond actual, proven damages, and provisions that removed the landlord’s liability in a number of areas, including for injuries and loss of property related to theft, fire or other circumstances.

***

Warnock said via email that tenants who rented from 2010 to 2012 can find more information and register to collect repayment at the Iowa Tenants' Project website. The deadline to register is Dec. 15, according to the Tenant's Project website.

Wednesday's ruling comes less than a month after the Tenants' Project reached a settlement with Iowa City's largest property management company, Apartments Downtown.(1) That settlement established a complaint process in which Apartments Downtown will pay to retain attorneys from the Iowa Tenants' Project to represent its tenants over the next three lease years.

Cape Contractor Accused Of Fleeing Bay State Bagged In Arkansas After Allegedly Fleecing Hundred$ Of Thousand$ From Homeowners, Subcontractors For Uncompleted Or Unperformed Home Improvement Work

In Orleans, Massachusetts, the Cape Cod Times reports:

Nicholas Willoughby, the contractor who allegedly took hundreds of thousands of dollars from Cape customers and subcontractors and then fled the state, was ordered held on $50,000 cash bail [].

Willoughby was arrested in Alma, Arkansas, on July 7 and brought back for arraignment on seven open cases in Orleans District Court. He pleaded not guilty to charges of larceny over $250 and larceny by a single scheme. He faces at least one more case [] in Barnstable District Court, according to Marion Broidrick, the Orleans court's clerk magistrate.

***

In one case dated July 12, a homeowner from Brewster told police he signed a contract with Willoughby to do a $421,000 job. About $300,000 worth of work was completed and then Willoughby stopped showing up and was eventually fired, according to court records.

A woman from Chatham said he took $90,000 from her in May to put an addition on her house. He dug a hole in her yard and never returned, according to court documents.

A man from Harwich gave him a check for $37,000 to add a garage to his property. Willoughby never did the work, records show.

***

Records from the state Office of Consumer Affairs and Business Regulation show that in 2008 Willoughby was found by an arbitrator to have unjustifiably abandoned a job and failed to pay for materials with sufficient funds, according to Jacqueline Horigan, public outreach writer and researcher.

Another complaint was filed in 2015 with that office, and in that case a homeowner was awarded $10,000 from the Home Improvement Contractor Guaranty Fund. This is compensation awarded to people victimized by registered contractors found to have violated the state Home Improvement Contractor Law, Horigan said.

When he failed to repay the guaranty fund, his Home Improvement Contractor registration was revoked in 2015, she added. His other license, as a construction supervisor, expired in February, according to the state Department of Public Safety.

Minnesota Woman Gets 12 Months Prison Time For Using Two Non-Profit Groups To Defraud State Out Of $480K+ Intended To Provide Housing Assistance To Needy Families, Combat Teen Pregnancy

From the Office of the U.S. Attorney (Minneapolis, Minnesota):

United States Attorney Andrew M. Luger [] announced the sentencing of ROBERTA BARNES, 59, to 12 months in prison. BARNES pleaded guilty in December 2014 to using two nonprofit entities to defraud the State of Minnesota for more than $480,000. [...]

According to her guilty plea and documents filed in court, BARNES was the president of two St. Paul-based nonprofit organizations, Agape House for Mothers (“Agape”) and Sierra Young Family Institute (“Sierra”). Through Agape and Sierra, BARNES won approximately $1.7 million in grant funds from by the Minnesota Department of Health (“MDH”) and the Minnesota Housing Finance Agency (“MHFA”).

From 2002 until May 2012, BARNES applied for and received grant money from MDH and MHFA to combat teen pregnancy and provide housing assistance to needy families. Instead, BARNES spent more than $480,000 of the grant funds on personal expenses for herself and her family; she attempted to conceal her fraud scheme by creating fraudulent invoices that reflected false expenses incurred by Agape and Sierra.

Sunday, September 04, 2016

Michigan Woman Cops Plea In $285K Swindle; Allegedly Had Herself Named Social Security Benefits "Payee" For Ten Vulnerable Adults Who Were Disabled &/Or Could Not Read Or Write, Then Pilfered Some Of Their Assistance Cash Earmarked For Rent, Housing Expenses, Food

In St. Joseph, Michigan, The Herald-Palladium reports:

A woman who was facing 26 felony counts in 11 cases involving fraud and/or embezzlement has pleaded no contest in three cases.

As part of a plea deal reached between Jill Mae Williams and prosecutors, Williams will agree to repay $260,089 to the Social Security Administration and a little over $25,000 to the Michigan Department of Health and Human Services, lawyers said Wednesday.

According to Berrien County Assistant Prosecutor Jane Wainwright, Williams had arranged for herself to become the “payee” for Social Security benefits for 10 vulnerable adults in Benton Harbor and was taking much of the money for her own use.

In the MDHHS case, she was using some of their food allowance for herself, lawyers said. The people she was charged with stealing from were disabled and/or could not read and write. [...] Berrien County Trial Court Judge Arthur Cotter accepted Williams’ plea and will sentence her Sept. 19.

***

William Brown, special agent in the Office of Inspector General for the Social Security Administration, said Williams is being sued by a corporation that owns the house where she was living. The 10 people she was allegedly embezzling from are or were tenants there, and some of their rents were not being paid, Wainright said. She said utility bills also went unpaid.

Williams, 56, is in the Berrien County jail pending sentencing, with bond set at $5,000 cash or surety.

She originally was charged with one count of welfare fraud $500 or more, one count of providing fraudulent information involving more than $500 in welfare, four counts of common law fraud, eight counts of obtaining $1,000 to $20,000 under false pretenses, one count of obtaining $20,000 to $50,000 under false pretenses, eight counts of embezzling $1,000 to $20,000 from a vulnerable adult, and three counts of embezzling $20,000 or more from a vulnerable adult.

Wainwright said Williams had become the Social Security payee for 10 vulnerable adults and was, in some cases, using some of the money for herself.

In one of the cases to which she pleaded no contest Wednesday, she collected $49,220 in Social Security benefits for a disabled man and misused $17,476. In another case, according to court records, she collected $54,078 in benefits and misused $31,453.

In accepting her plea, Cotter noted that in an interview with an agent for the Social Security Administration, Williams admitted to reporting false information, misusing some money that belonged to vulnerable adults, did not have proof of spending for the peoples’ daily needs and mentioned going to casinos.

Originally Labeled A Civil Matter, Recent Accusations Lead To Criminal Charges Against Convicted Scammer With History Of Home Improvement Complaints; Suspect Pinched For Theft From Person In Protected Class After Allegedly Fleecing Three Elderly Homeowners Out Of Over $25K For Roofing Work, Then Failing To Either Perform Promised Services Or Reimburse Victims

In Stark County, Ohio, The Press-News reports:

An Alliance man said that he was completely unaware of William W. Dinger's track record when he hired him to put a roof on his home.

The unnamed man was one of three victims whom Alliance police said that Dinger, 60, of Canton, allegedly took for in excess of $25,000 since April, resulting in officers charging him with three counts of theft from a person in a protected class,(1) one third-degree felony and two fourth-degree felonies.

Dinger had two previous felony convictions on similar charges in 2009 and 2012.

City police Lt. Bill Morris has no doubt that there are probably more victims out there.

Dinger already was in Stark County Jail [] on a charge of grand theft, which appeared to be a direct indictment, when Alliance delivered their three warrants -- one stemming from his failure to deliver $12,000 in roof work for three properties in the area of State Street and Watson Avenue as well as roof work of approximately $8,000 and $6,800 to two victims.

Morris said that clients had paid for the materials back in late April and filed the reports with police after Dinger failed to deliver.

Originally labeled a civil matter, Morris said officials gave Dinger until Aug. 1 to either reimburse the clients or finish the jobs. He did neither, so Alliance Law Director Jennifer Arnold approved the charges.

***

Dinger reeled in his victims, who felt sorry for the seemingly nice guy with a large family and numerous exes who was just trying to make ends meet. "He sure was a real good talker," the unnamed victim concluded.

Anyone else who may have information about Dinger or who may have been one of his victims is asked to call Morris at the Alliance Police Department at 330-821-9140 between 8 a.m. and 3 p.m. weekdays.

If convicted of these latest charges, Dinger faces up to nine and a half years in prison and $25,000 in fines plus imposition of any suspended prison time [from previous convictions].

A former branch manager of Chicago Title in Lynden has pleaded not guilty to the arson of her own home northeast of Bellingham.

The four-bedroom house [...] caught fire a little after 11 p.m. April 19, 2015, according to charging papers filed in Whatcom County Superior Court. Flames tore through the roof before firefighters could extinguish them.

No one was hurt, but the single-story house and attached garage were total losses.

The house was in foreclosure with a sale date set for June, because the resident, Kathleen Ruth Kooch, 48, had stopped making mortgage payments, charging papers say. She still owed more than $480,000. Kooch kept paying for insurance, however, on a coverage plan worth more than $1 million.

Hours after the fire Kooch met investigators, with finished insurance documents. She said she’d already made a claim with her insurance company, according to the charges.

“These documents would have been prepared by Kooch prior to her even seeing the fire,” charging papers say.

***

Investigators with the county fire marshal’s office quickly suspected arson based on burn patterns and evidence suggesting it was sparked by matches or a lighter, charging documents indicated. The fire had started in a mudroom, between the kitchen and garage, with doors left open to help the flames spread, said Deputy Prosecutor Evan Jones.

***

Kooch has no felony record in Washington state, but she has another case pending against her.

Last year Kooch and [boyfriend Steven] Sigur were charged with felony theft in an alleged scheme where they forged checks from Chicago Title, and cashed them under Sigur’s other names.

A real estate investor made a sobering discovery inside a property in Fountain that he bought at auction last week. The body of the previous owner was lying on the bed.

Fountain Police tell News 5 a neighbor called in January to request a welfare check at the home, but when officers arrived, nothing suspicious was found. Officers were unable to enter the home without a warrant.

Detectives tell News 5 since the remains were discovered, they've learned that the previous homeowner, Simone Daye, stopped paying utilities in April of 2015. The U.S. Postal Service had even stopped delivering mail when it began to build up in the mailbox. However, neither agency told police.

Investor Hootan Emami said he went to the house for the first time Thursday and thought it was an abandoned property.

"The bathroom was very clean and normally we don't see it like that," Emami said. "Normally speaking, you don't see a soap dish that has soap in it."

There were two cars in the garage along with cans of soda stacked neatly on the shelves. The kitchen was clean and in order. There was dust everywhere, but the home didn't smell bad, Emami said. He walked upstairs, where he saw someone lying on the bed in the master suite.

A nephew of a deceased Staten Island man wants to disinter his uncle’s remains from his family’s burial plot and exile him to another part of the cemetery after a dark secret posthumously came to light, court records show.

Michael Fleming, 41, made the unusual request in a petition to the Staten Island Supreme Court, stating that shortly after the death of his uncle, Alexander Hamilton, his sister accused the uncle of sexually abusing her when she was a young girl.

Hamilton, who never married and had no children, died in 2013 and is buried three grave sites away from Fleming’s father and other relatives in Resurrection Cemetery in Pleasant Plains.

Fleming’s two sisters and mother won't visit their father’s grave because of his proximity to Hamilton’s, the petition says. Fleming’s mother, Geraldine, also refuses to spend eternity next to her husband with Hamilton nearby.

“My mother and sisters refuse to visit my father’s grave due to the proximity of my uncle’s grave to that of my father’s location,” Fleming said in the petition. “Furthermore, my mother has made it clear that while she wants to be buried in the same grave as that of my father, she will not permit it so long as my uncle remains in his current grave.”

Fleming’s sister — whose name DNAinfo New York is withholding due to the nature of the accusations — told her family that Hamilton abused her from when she was age 4 to 14, according to the petition.

“My family was devastated to hear this,” Fleming said in the petition. “[My sister] disclosed to us that it was only after my uncle’s death did she find the strength and fortitude to open up to us and reveal the abuse she experienced by my uncle.”

Fleming, who is the executor of Hamilton’s estate, said he has purchased a burial plot for his uncle in a different section of Resurrection Cemetery and is ready to move him. The petition said it’s easier for the family to move the uncle rather than their dad.

“The reason we are seeking to disinter my uncle as opposed to my father is due to the fact that we have other relatives buried in close proximity to the grave of my father, and due to the atrocious acts my sister had been exposed to by my uncle, if anyone should be moved, it should be my uncle so that our family can pay their respects to my father and my mother can join him in perpetuity when the time should come,” Fleming said in the petition.

CBC News: Betrayal of Trust (A CBC investigation reveals how lawyers across Canada have misappropriated and mishandled clients money, to the tune of tens of millions of dollars, or sometimes even charging vulnerable people top dollar for shoddy services)

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